Examination of Witnesses (Questions 21-36)
MR JOHN
GRIMOND, MR
CHRISTOPHER LOCKWOOD
AND MR
DAVID LOYN
15 JUNE 2004
Chairman: We now move on to the next
witnesses. You have heard what Michael and James said. Some of
the questions will be slightly similar, not entirely the same.
What we are looking for is a different gloss, things you think
have been left out, whatever. One area we did not cover in that
previous session was HIV/AIDS.
Q21 Chris McCafferty: In 2001 the Government
of India actually signed and adopted a national AIDS prevention
and control policy. It is the case that many people feel that
because they have only committed just over £38 million of
their own funds to the fight against HIV/AIDS over a five-year
period perhaps they are not as committed as they ought to be to
AIDS prevention. There is a thinking that they have not been very
forthcoming in trying to deal with intravenous drug users and
in particular men who have sex with men. I should be interested
in your assessment of the Government of India's attempts to deal
with the HIV/AIDS crisis.
Mr Grimond: Yes, I agree with
you very largely. It is fair to say that many onlookers have felt
that the government has not been doing enough. I did not know
the number was £38 million, I thought they had spent next
to nothing to be honest.
Q22 Chris McCafferty: They have committed
£38.8 million over five years.
Mr Grimond: They did announce
something. They said there would be an item in the budget at the
end of last year. When I last looked, which was not very recently,
it had not yet appeared. There has been a change of government
since then and who knows what will happen now. Of the $800 million
which has been pledged to fight AIDS both through education and
through actually applying money to those who are infected with
HIV, virtually none has come from the Government of India. Health
is of course a state concern in India, so it is not strictly a
national government responsibility, but it is fair comment to
say that there has been a considerable reluctance to get involved,
that many people would say that the government was in denial for
at least five years on this topic altogether. It is now nearly
20 years since the first case of AIDS was diagnosed in Chennai
in 1986 and it is only fairly recently that a serious campaign
has got going and that has been very largely thanks to the exertions
of foreigners, that is to say of multilateral donors, of bilateral
donors, of various NGOs within India; in fact I know of some charities
within India, but very largely outsiders, UNAIDS, the World Bank,
DFID, etcetera. There has been a considerable reluctance
for politicians to tackle this topic. It is never easy for politicians
in any country to do it; we have seen that in Africa for instance.
On the other hand India has the benefit of the experience of other
countries like Africa and perhaps more pertinently Thailand and
to some extent Brazil, where successful campaigns have been put
in place. There has been very little willingness, of politicians
in particular, to stand up and say "I've had a test. Why
don't you go and get one?". I am not sure, but I should be
amazed if any politician has said that; certainly no politicians
has acknowledged contracting HIV and there has been very little
encouragement in general of people in public life, Bollywood film
stars, celebrated cricketers, whoever it may be, to stand up and
say "Yes, I've got it" or "For God's sake get a
test to find out whether you have got it" or even "I've
had a test". There have been exceptions to that and there
have been some courageous politicians at state level, including
Chandrababu Naidu and we have just heard that he has been booted
out, so it obviously did not do him a lot of good. Nonetheless,
there have been state politicians who have been more courageous
and who have been more outspoken and introduced campaigns whether
on education or of a more active kind, particularly in the six
states which have been designated high prevalence. Things are
happening, but probably not as a result of any great effort at
the centre until fairly recently.
Q23 Chairman: Is there anything you feel
needs to be added to that?
Mr Lockwood: John is our resident
expert on this at The Economist, so I do not want to say
very much, other than to note that India is a place where such
matters are for some reason not at all easy to discuss. It is
strange, considering that this is the land of the Karma Sutra,
but it is still quite a puritanical society, as one notices from
movies, from the way advertising is conducted. That is starting
to change and there is hope therefore that, as sexual matters
come out into the public domain, we may see a greater ability
to confront these very difficult and serious issues.
Q24 Chris McCafferty: Do you see any
implications of the change of government? Do you think that may
bring about a different attitude to this issue?
Mr Loyn: It will not make any
change on this. I was told when I did a report on this once, that
there was no homosexuality in India and therefore there was no
AIDS. One of the contributions which Sonia Gandhi made before
she went into active politics was to raise the profile of HIV/AIDS
in India, but they are still a long way behind Africa, certainly
behind countries like Uganda where you can actually talk about
prevention. It is a major health problem and a time bomb and a
subject which the international community and international organisations
have done much more to raise than the country has.
Q25 Chris McCafferty: What do you see
as the projected economic impact of AIDS/HIV in India?
Mr Grimond: It depends entirely
on whether it is brought under control. AIDS is an expensive disease
to treat. It is expensive to conduct tests on everybody whom you
need to test if you want to run a successful campaign, but it
is also a very expensive disease to neglect, because once you
get to the position where AIDS has spread into the general population,
as it has in many parts of Africa, then it ceases simply to be
a public health problem, but becomes a huge development problem.
You find that people in every activity of any kind, every economic
activity in the country, are affected by it. That is why in Africa
you will find that nurses, teachers, doctors, civil servants,
businessmen, engineers are all dying of AIDS with a huge economic
impact. You have the statistics for life expectancy and so on
falling very acutely. Some people believe that will happen in
India and it seems to me highly likely that the number of people
who are infected, and who in all probability therefore will die,
will increase. There is a view that most of these people who are
infected are not very productive people anyway and candidly it
is not going to be very serious if a number of prostitutes or
drug addicts or homosexuals happen to die of AIDS, that indeed
may do no harm whatsoever to the economy. That is a thoroughly
mistaken view, not least because many of the people who are actually
going to be infected with AIDS are probably the entirely faithful
wives of husbands who attend brothels or go to prostitutes. They
may be teenagers who are engaged in what most people would regard
as entirely natural and benign sexual activity. They may be people
who are in one way or another trained and educated and have therefore
had a lot of public money invested in them and there will certainly
be a huge public cost to this. It is likely to be very expensive
and even if none of that comes about there will be a need for
very much greater expenditure on health. One of the reasons that
one thinks that AIDS is a problem in India is that generally speaking
public health is a problem in India and very little money is spent
on it: $14 per year per person in a typical year, 2000 being the
latest year for which there are comfortable figures. That is the
government expenditure. That is less than 1% of GDP going on health.
There are only eight or nine other countries in the whole world
which spend as small a proportion of GDP on health as India does
and the result is that you have very high incidences of things
like sexually transmitted diseases, which are instrumental in
spreading AIDS, very closely associated with the spread of AIDS
and so on and tuberculosis is also a huge problem which is again
associated with AIDS. In one way or another there is going to
have to be a huge increase in expenditure on health; not that
that alone guarantees good health, but it is noticeable that a
state like Kerala for instance, which does spend more on health
though it is a poor state, has very good results. So for a relatively
small increase in the amount of money spent—in Kerala it
is $28 rather than $14—you can get health profiles which
are broadly the same as in the United States. It does not mean
that you have to spend a huge amount more, but you will have to
spend more.
Q26 Chris McCafferty: Is there any evidence
of a linkage between reproductive health education and services
and HIV/AIDS in India at all?
Mr Grimond: There may be. The
short answer is that I do not know.
Mr Loyn: The answer is that I
do not know. You mentioned Kerala where female literacy and health
care and education all go hand in hand and where HIV/AIDS is far
lower. It must be true, but the answer is that I do not know.
Q27 Tony Worthington: You have had a
couple of weeks to reflect on the election results, which it seems
everyone got wrong. You undoubtedly had economic growth and the
popular interpretation is that the poor said they had not had
any, they had been left out. What is your interpretation of what
went wrong for the government and why it was all forecast wrongly?
Mr Loyn: I think, slightly at
variance with your earlier witness, that the election was lost
in Andhra Pradesh curiously enough. The BJP did not lose this
election. The BJP's vote went down from 23.7% to 22.1% and the
Congress vote went down from 28.3% to 26.7%, that is both the
big parties had about one quarter of the vote, one just more and
one just less. What happened in this election was actually very
similar to British politics. By the vagaries, as we saw last weekend,
of first-past-the post and Congress getting its act together with
smaller regional parties and agreeing with those parties that
they would not stand against each other in some states, you had
Congress getting a few more seats and doing a better coalition
than they had done before because they were so burnt by the 1996
election result that they could not talk to anybody for so many
years. You had Sonia Gandhi emerging as a national figure for
the first time, having marginalised all of the leaders of the
next generation, the two best of whom died, Rajesh Pilot and Madhavrao
Scindia. In my view the Congress Party still remains in terminal
decline and it is a deeply unstable government with some pretty
roguish elements. Any government which has Laloo Prasad Yadav
as a cabinet minister within it has to be extraordinarily suspect
by local standards, let alone international standards, and which
has another MP, Shibu Soren from Jharkhand, who is currently facing
several murder charges as well as kidnapping and extortion and
all the other things which go on in Jharkhand politics. There
is some feeling that this is a government which cannot last internationally
for a long time, even though it has at its head Manmohan Singh
and Chidambaram, who were the two key founders of economic reform
during the Congress government and will continue that reform programme
forward.
Mr Lockwood: I would not be quite
as pessimistic. I think that the previous BJP government was in
itself a rather unwieldy coalition. At one point when it began
there were more than 20 parties, though that was whittled down
to about 15 and yes, it managed to stay the course and get some
reform done; not very much, not nearly as much as it wanted to
do. It is quite possible that you could see this government, if
not run all the way to term, at least run for three to four years,
which would be going quite well by Indian standards. Whether it
will be able to do anything useful in that time is the big question.
The problem is that it is a government which relies on support
from parties outside its own coalition which are the Communist
Parties of West Bengal and Kerala and that is going to be difficult.
They have imposed constraints on it but the constraints are quite
interesting. What they have said is "You may not privatise
profit-making companies", but they are not saying "You
can't sell off loss-making companies" and most state-owned
enterprises in India are loss-making. So they seem to be saying
"Yes, we will allow that process to continue". In West
Bengal itself, the great Communist stronghold, they have a programme
of disinvestment, as they call it, privatisation as we would call
it, which has not been enormously successful, but has resulted
in about 12 companies being placed on the block. It is a country
where IBM thinks it is a good place to do business. So it is possible,
especially with these two very strong reformers at the head of
Congress, plus a Communist Party which is more supportive than
it might appear, to imagine getting a reasonable amount of reform
done and the most encouraging thing about India is that for the
first time ever you have both main parties, the BJP and Congress,
committed to reform. It has not been the case in the past, but
it is now. It is getting to the stage where it is not as big an
issue as it used to be.
Q28 Tony Worthington: What is the relationship
between those reforms and poverty? Are there policies which are
no-go areas because of opposition or were the reforms which were
working benefiting the poor or did the poor feel left out? I was
thinking particularly about the rural poor.
Mr Lockwood: The poor plainly
did feel somewhat left out, but as David has very well analysed,
this was not a huge anti-reform vote by any means; it was as much
an anti-incumbent vote and a shifting of the parties as anything
else. The poor will not directly and immediately benefit, but
if you look at China, the other place where radical economic reform
has alleviated poverty in a massive way, all government really
needs to do is get off people's backs, sell off loss-making businesses,
stop pouring money down the drain, which is what it is doing now,
use that money to build a good infrastructure, which is what India
really needs, not subsidies, and let people get on with it. There
is a chance that you will see that.
Mr Loyn: The key surely is fiscal
reform. They are talking about introducing VAT and spreading fiscal
reforms much more across the system so they actually raise more
taxes, which currently they have not been doing very successfully.
Only then can they do one of the key parts of their common minimum
programme, which is pro development, which is to raise education
spending to 6%. The BJP government also had the same target of
6% and never achieved it; education spending is 3.2% of GDP at
the moment. The key is getting fiscal reform and possibly Manmohan
Singh and Chidambaram are the two people who could do it and restore
what they were doing in the 1990s.
Mr Grimond: One rather gloomy
reflection of the election, as far as the rural poor are concerned,
is that in places like Andhra Pradesh, a considerable effort has
been made by the chief minister, Naidu in this instance, to get
self-help committees set up, which were chiefly for the benefit
of women, run by women very largely, at panchayat raj level, village
level and which seem to be desirable in all sorts of senses, primarily
for economic reasons but, from his point of view, if they actually
resulted in people getting a bit richer, then presumably there
would have been a political pay-off, which is not after all such
a terrible thing in a democracy. That would have worked to his
benefit, but evidently that did not happen and Andhra Pradesh
was one of the states in which there were really a lot of these
and a big network of self-help committees at the very lowest level,
which would, had they worked—perhaps they are working to
some degree—have made quite a difference to people's lives
at the very, very bottom of the heap. That does not seem to have
done the trick for Mr Naidu anyway.
Mr Lockwood: It is clear that
it did not do the trick. One reason though is that they had had
several years of very bad drought. India has had a big problem
with drought over the last few years, but literally in the last
year they had very good rains, thus a good monsoon, thus a very
large year-on-year growth figure which the BJP was able to trumpet
in its India Shining campaign, though not in Andhra Pradesh
where there was a very bad harvest and had been for several years
before that. All the good things that Naidu was doing were outweighed
by that.
Q29 Mr Battle: Maybe it is not just a
question of the weather or monsoons, but that the economic reforms
had not really worked for agriculture. Would you agree with that?
Mr Loyn: The answer is that they
certainly had not in Andhra Pradesh. That was a state where a
very large number of MPs went the other way, went towards the
now Congress-led coalition, and Chandrababu Naidu, the man who
saw George Bush and Tony Blair as his personal friends and liked
to talk about that in the state, has lost power because of it.
I think he has lost power because those policies which John was
talking about in terms of getting the rural poor engaged did not
work because there was a very strong feeling among the rural poor
that this was all leading towards large farms, leading towards
people being taken away from their land. There was an attempt
to increase electricity prices at a time when there was very bad
drought in the state and there are parts of Andhra Pradesh which
are as poor as anywhere I have been in the world. In northern
Andhra Pradesh in the mountains there are people who have no access
to central government or education or health care whatsoever and
their only response is to support the Maoist rebels, who are very
strong in that state as they are in Jharkhand and Madhya Pradesh.
You can see real problems in that area which are well outside
the kinds of attempts at reform which Chandrababu Naidu was engaged
in.
Q30 John Barrett: Within India the debate
about poverty and how to go forward is high up the agenda now
the government has changed. You mentioned earlier on that 1% of
GDP is being spent on health, but 3% of GDP is being spent on
defence. Is there a debate within India about reform? There have
been discussions about fiscal reforms and introducing VAT, trying
to deal with tax evasion, yet at the same time massive amounts
of budgets in certain states are still being spent on salaries.
From your own experience have you seen a questioning of the fact
that while we are talking about development aid and the fight
against poverty, at the same time we see a £1.6 billion contract
being signed for training jets? The last time I was there we looked
at a project in the fight against TB which over five years was
going to cost £20 million; that is the same as the cost of
one jet. Is this debate taking off in India as to exactly what
the government of either party is doing in that poverty debate?
Mr Loyn: I have seen no discussion
of it and certainly the feeling among the Delhi-based press is
that strong defence is a very good thing. They were extraordinarily
proud of the nuclear testing and pretty pleased. I was there during
the time when one million men were either side of the border three
or four years ago and the two sides came very close to conventional
war. On neither side, neither Islamabad nor Delhi, did this seem
to be a very bad idea. There was a real feeling that strong defence
is a very good idea for India and, as one of your professors said
earlier, if you did cut defence spending there is no suggestion
that it would then immediately go on health or education. There
is also very little discussion within the Indian establishment
about foreign aid and it was LK Advani, from whom people were
trying to quote before, who said last year "We are no longer
a developing country". That was the time when they were beginning
to move away from smaller countries giving them small amounts
of aid but still allowing bilateral donors like Britain to remain.
There is no real sense of India being a country which is a recipient
of aid. There is an enormous pride in India doing things on its
own. If you go to Bhuj, for example, where the earthquake was,
there was a huge inflow of humanitarian assistance from around
the world. I talked to the district collector there about six
months ago on a return to the earthquake zone about the international
aid and he refused to answer on camera any questions about it
because politically he knew that he had to talk about the money
which had come from the Union Government. There is no discussion
of the kind we are having in this room at the moment at all within
India.
Q31 John Barrett: One thing I did detect
was the increasing politicisation of women's groups. A lot of
people have a very low opinion of their MPs in a variety of countries
and there was no exception over there. I did actually see a lot
of discussions within women's groups saying "We are very
much in the frontline: poverty, children, HIV/AIDS and lack of
basic supplies, health care and so on". Is that not being
affected by their media, their press, television, radio?
Mr Loyn: Not hugely; not in a
big way, not in the centre. The Indian newspapers, perhaps like
ours, have a way of seeing the world and going down to small villages
and talking to women's groups in the way you might do or we might
do is not something that a lot of Indian journalists do.
Mr Grimond: It has to be said
that it is a vast country, you will find all sorts of things going
on there at the extremes and there is a huge number of highly
educated people, many of them educated in the West, who do indeed
share a lot of the sorts of interests and concerns that no doubt
this Committee has. Therefore it is very easy to mix in circles
in Delhi or wherever where a lot of people will be well-informed
and express views on this sort of thing. That does not necessarily
mean that it is translated into the highest echelons of government
or the civil service. National pride is extremely acute; nearly
all aid is funnelled through the government in one way or another.
It is striking that although the government spends next to nothing
on AIDS itself, nonetheless it offers a soft loan programme to
Africans for their aid programmes. Just as India has a space programme
and spends 3.1% of its budget on defence, this is seen in terms
of national pride, "We should have an aid programme of our
own in which we give money to others to fight AIDS even though
we do not spend money on our own AIDS problem at home".
Q32 Mr Robathan: May I turn to the ailing
BIMARU states in central and northern India, which are some of
the poorest of the states? How are reforms going to be kick-started
or carried through there, where really there is very little off-farm
employment and where rates of unemployment amongst educated youths
are running very high? What prospects do you see in those states
for economic reform and what impediments would you see there as
well?
Mr Loyn: Very grim.
Q33 Mr Robathan: That is a succinct answer;
thank you.
Mr Loyn: They talk in India about
the development divide. One of the worst aspects is that you have
75% more development spending on the bigger southern states which
work, including Andhra Pradesh which we put money into, than you
do in the BIMARU states. So you have high growth, low unemployment,
low population growth and high development spending all going
together in the states like Kerala and Tamil Nadu and parts of
Andhra Pradesh. In the BIMARU states you actually have negative
growth at the moment and it is very difficult to put money into
them. It is a big challenge for DFID, probably one of the biggest
challenges, to see what you do about Bihar and what you do about
Jharkhand because you cannot operate in a bilateral way with a
state administration led by Laloo Prasad Yadav's wife because
the money disappears. If you have been to Bihar you will know
that it is a place of ruination. I wonder whether DFID should
put more money through civil society groups, through NGOs and
move away from big bilateral spending in order to achieve the
kinds of developments in health and education in those states
which you cannot achieve in any other way.
Q34 Mr Robathan: You have suggested Bihar
is a byword for corruption, which I had heard. I have never been
there, but I believe that there is corruption and violence there.
Mr Loyn: Yes.
Q35 Mr Robathan: What about the other
states? Rajasthan is one of the BIMARU states, is it not and Jharkhand?
Mr Loyn: Rajasthan is more workable,
Madhya Pradesh is particularly workable and always mentioned within
the BIMARU group. The UNDP identified an educational programme
in Madhya Pradesh which has produced 30,000 schools in only four
years and 80,000 schools were developed in the first 50 years
since independence. That was done through very, very little spending,
working through small village groups, but it was done in a state
where governance is not anything like as bad as it is in particular
in Bihar and Jharkhand. To lump them all together and say they
all have the same problems of corruption and crime is a mistake,
just because they have the same development statistics.
Q36 Mr Khabra: Accepting the notion that
India's governance system largely fails to deliver services to
the poor, what is the primary objective of aid programmes that
target fiscal reform, when the fruits of such reforms mostly elude
their intended beneficiaries? Unlike most developing countries,
India lacks neither capital nor technical expertise; in fact it
is well known that it exports to everybody. So what is the point
of aid to India?
Mr Grimond: You can make a case
for saying that there is no point in aid to anywhere. I do not
subscribe to that. I think the professors whom you cross-questioned
before we came on gave you a compelling series of answers as to
why you should aid India. You will not be able to change the face
of India overnight with the DFID budget and it would be naïve
to think that you are going to make even a very large impact.
You can make a modest impact in a number of areas and, to take
the example of AIDS, if outsiders were not doing anything you
would not find that actually the Indian government was therefore
stepping in with $800 million of its own money which would not
then be spent on its space programme or on its nuclear programme.
I think you would find that very largely the job was undone. So
I think there is a role for foreign bilateral and multilateral
assistance. I am sure it can be improved upon. I am sure that
you can do it more intelligently, possibly through using NGOs,
as has been suggested, who are very active and who are very often
the people who are closest to the poorest. I would not be too
pessimistic.
Mr Loyn: If you do not deliver
aid to India you will not get anywhere near the MDGs, the Millennium
Development Goals. That is the best case for aid to India. The
fact that the central government's reforms do not reach the poor,
which is the first part of your question, also has its own answer,
which is that therefore other development aid has to come in,
if you have a government which is not currently spending enough
on its own people.
Mr Lockwood: There are enormous
numbers of good things which can still be done. Capital clearly
is not the point. The total DFID budget, if given to India, would
only be a drop in the ocean and India has capital. Expertise,
yes, India has a lot of that but there are plenty of areas where
we can do a lot. We can work on things like tax collection, we
can work on things like public administration. There are enormous
numbers of areas where technical assistance could be very useful
as long as that aid is precisely targeted.
Chairman: Thank you very much. I promise
we shall continue to read The Economist religiously and
listen to the BBC. Thank you very, very much for your contribution
today.
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